Global House of Cards
Flagg' view of a global house of cards......
Here's wha I see:
--------
Financial House of Cards:
The US government AND it's citizens have been spending money like sailors on shore leave at a level that is CLEARLY unsustainable. Backing this spend up on booze and hookers is a currency that is being tarnished like a 3rd world peso and incredibly overleveraged McMansions dependant on cheap energy and low interest rates.
The same export desperate currency moves and overleveraged property booms is also occurring to a greater or lesser extent in the UK, Canada, Aus, and NZ.
--------
Energy Security House of Cards:
Saudi Arabia is run by an increasingly top heavy family of legal crack dealers running a crack house with an exploding unemployed population highly educated, not in tangible skills, but in Islamic studies vulnerable to militant influence due to eroding economic opportunties and a one industry economy that is starting to show signs of distress
Russia has nationalized it's energy resources either directly(Yukos) or by indirect proxy. In a country in desperate need of foreign investment capital, only a fool would chase it out by making the energy grab. Putin is many things , in my opinion, but I don't think he's a fool.
Iran, sitting on a pile of oil, appears in no hurry to damage it's oil fields to satiate global demand like Saudi Arabia has consistently been able to do with ominously increasing difficulty. An argument could be made Iran is happy to see oil prices skyrocket as it's insulated economy could weather a global recession/depression better than most......the oil's going no where, why not sel it for more later than less today?
Venezuela, Chavez, nationalizing the oilindustry, is drunk with power..he has REAL oil leverage, he knows it, and he's telling the world thru his actions.
Libya, led by a poster child for terrorism who deserves a date with a rope, instead shakes the hand of Tony Blair and now they are "good guys."
Iraq, regardless of declared motives, is a major energy source.
West Africa is a dirty powder keg of factions fighting to gain control of oil & gas assets.
China Sea scramble between China and Japan is only beginning to present an issue, the Spratley's will also be on the horizon.
China is offering silly money "blank cheques" for energy deals
Even motives for the East Timor intervention are tainted with energy security deals.
In a nutshell, EVERY major energy producing region on the planet(with the exception of Canada's expensive to produce and still relatively small scale oil shale reserves) has been recently nationalized, forgiven their crimes against humanity, or has/is currently/or will likely experience conflict in a mad scramble for energy security.
It's looks like the world's biggest scavenger hunt in a world of increasing demand for energy(with India and China now taking their historic places in gobal GDP potential) and slowing energy discovery and production.
---------
Conflict/Insurrection House of Cards:
Iraq is still highly vulnerable to a large insurgency and undermining from Iran..could a Shia led Iraq turn on the US down the road in a growing regional conflict involving Iran?
Saudi Arabia's corrupt leadership is eventually untenable.....will the successors view the US with contempt due to it's support of the Al Saud clan of crack dealers?
Egypt, although reforming, is a BIG question mark once an aged Mubarak takes a dirt nap...will Egypt turn a hostile posture towards Israel?
Iran has played it's hand well in it's desire for nuclear capability. If a military option is required to contain Iran's ambitions will a wider conflict inflame the region/planet?
---------
In my opinion, I'm thinking we're in for a good couple years of hurt......in every sense....financially, socially, and militarily(expanded conflict).
Economic growth centered around Equities in the 90's, Property boomed from 2000 and will last until ???? , the only thing left is commodities(the recent surge in oil, gold, copper, etc still hasn't come close to inflation adjusted highs yet).
The last time commodities surged BIG(after the same equity and property cyles) started right in the middle of the Vietnam conflict. I'm not saying Iraq is Vietnam...but there are some frightening financial similiarities.
Average folks around the world took it in the rear for about 10-15 years with shockwaves felt even longer in some places.
Moving forward, I think even a limited conflict, outside of existing deployments in Iraq/Afghanistan, will present a tipping point towards the negative that's going to impact most folks on this forum.
Wha do you folks think?
I agree with much of that.
One thing I would add is that I think China will be trying to extend its influence in the oil rich Central Asian Republics (Uzbekistan looks like being the first 'beneficiary')
The Iranian petroleum exchanges decision to start trading in Euros may lead to some interesting times too (I'm not an economist so I can't really pick my through all the conflicting claims about that though)
the Chinese apperently have a sizeable "insurrection/terrorist campaign going on with the Ughiur in the Western part's of China, I've seen report's that there are on average 2/3 bombing's a week!, how do they keep it under wrap's so well?
btw Flagg, agreed 100% about the Saudi's, they have 13,000+ "princes" in the royal family, and they all get paid!, that's just a situation waiting for a coup, only so much crap people can put up with, especially with the high indigenous saudi population unemployment
Speaking about the problems the Chinese face. I've heard it's pretty intense at times as well. All muslim extremists. That whole region did give birth to Atilla the Hun and has never been effectivly ruled by anyone.
Not suprising really.
Very interesting. Maybe it's a function of my age - but I also see the world as an unsustainable house of cards. But then at some level, I understand that it's always been that way and that change, even painful change, is not the end of the world. As long as you can catch the leading edge of a wave - growth is the name of the game - you're own personal future is bright.
Some good points on the energy driven stuff. It seems that since 1900 or so, we've been constantly fighting each other over oil, or access to oil. I think that will continue. The Middle East - largely a collection of pretend nations cobbled together over various lunches last century, will continue to shake out along ethnic and religious lines. As long as the cheap oil keeps flowing, and they don't spend the profits on anything that threatens stability, we really don't care.
I tend to think that the biggest single factor for the average Joe, at least in the short term, is the global economy, and outsourcing. This has wide ranging effects - as manufacturing leaves the West, and takes along with it the artificially and unsustainable generous wage and benefit packages that unions brought.
I see massive protectionist pressures building up as retirement and pension funds collapse - take a look at GM, the largest body on the pile so far. Merry Christmas, here's your last paycheck, and forget about your retirement money since we're legally not obliged to fund it thanks to our restructuring.
Once the trade barriers go up, manufacturing will begin to return, but with no unions (notice that Toyota, a non-union shop, is poised to take over the #1 auto maker spot and is building, not closing factories in the US).
The Chinese of course play a huge part in the outsourcing problem - and they are facing ever increasing internal unrest as regional governors buy farmland from peasants at agricultural prices, then resell it to GE or Siemens for a hundred times that. There's a huge divide between the new economy and the old. The peasants have noticed. Watch for Chinese manufacturers, flush with money, to begin building (or buying) factories in the US in response to protectionist pressures.
I think that the next US election will turn on immigration and outsourcing - with the left trying to play up the war but getting no traction.
I agree 2Sheds......Originally Posted by 2Sheds_Jackson
What concerns me is how intensely interconnected the most glaring issues are. It's like a Mexican standoff with dozens of participants just waiting for the first shot to be fired.
Don't get me wrong.....I see lots of good things happening as well.
I just don't see sufficient "debth" in our respective economies, our energy independence/security, and our cultural values(not the religious variety...more like the stick your head in a hole and go into further debt variety) to successfully weather a big "storm".
sad as it sounds, we might start seeing a yearning for a return to the ¨good ol days¨ of a bipolar world in which you were either with the US or with the URSS, but there was no in-between. It made for a simpler world (abeit one with a very large nuclear sword hanging from the ceiling).
Energy is the biggest. I sure hope they bring in nuclear fusion ASAP. That would solve a LOT of problems. But if push comes to shove, I think a lot of 3rd world countries that have energy reserves and going to find themselves under military ocupation, faster that you can say ¨were is El Dorado?¨
I think that western economies know a days a crack addicts and China funds the habit.
Oh my, don’t get me started on one of my things are about to change rants again. Yes, I agree and have noticed patterns very similar. I see an economic slump and world factional realignment on the horizon.
I see major eventual political realignments in key political players as public enmity increases over worsening factional infighting causing even more legislative paralysis.
More players will publicly screw everyone for his/her own interest by taking the initiative thinking out of the box which will attract even more hate and discontent to the system after the resultant special investigations and flood of media intrigue. The credibility gap of many governments will widen. Polarization will worsen.
A socio economic implosion is about to occur as the post cold war world realigns and the US, vacillates, playing approach avoidance with empire, is leveled bit by bit by a host of smaller, more competitive and aggressive players who want and actively seek it or to prevent it.
Personally, I’ve been saving and bracing for impact. The prospect of a world economy much resembling something worse than the late 70’s annoys me to no end. Combine this with world political realignments that will most likely happen and one has a real witch’s brew. I sense changes on the wind, big changes.
In my opinion, I think the best chance to potentially avoid or dramatically alleviate most of the problems identified(not to say there aren't other potential "bolt from the blue" crisis on the horizon) is to approach energy security with the same sense of urgency and passion as the Manhattan Project or Apollo Moon Shot.
As energy security is nearly all encompassing for everyone regarding everything, it should be national priority #1 #2, AND #3.
Unfortunately, I question the amount of intestinal fortitude our instant gratification society possesses, combined with a political system focused almost exclusively on fulfilling only short-term wants rather than long-term needs.
Ha, trying to get companies invest in new energy alternatives are we?
Pigs might fly to.
Fact of the matter is there is simply to much money at stake in the short term for a company to invest in the long term.
BTW 2Sheds. Toyata in Australia is very much a unionised company. Actually most manufacturing, mining, industry is union dominated.
I think America's biggest problem is not so much the manufactures paying for retirenment plans but rather the US government not providing enough services (Health, education, childcare, retirenment services) for it's population. Unions have only asked for what say many in Australia take for granted because the government provides it.
Put simply. GM would not be in the position it is in, if say the government provided a universal health care system, provided unemployment safety nets, retirenment incomes for those who for what ever reason could not provide for their own retirenment.
Instead the US has ignored many of the positive aspects of socialism and because of which, it's firms due to union pressure to secure for it's members benefits which in many other country's the government pays for.
and because these same firms profits are going down, so to is the taxation income. Thus increasing even more pressure on the government.
Basically by the very design of the "American Way" America has put itself into a very large hole that unless drastic measures which if done would completly change the face of America.
Another area to in which American firms are struggling is not so much the cost of employment but the quality of the training provided. Take my professional qualification for example. I'm a boilermaker by trade. (we used to make steam boilers back in the day) but now we weld, fabricate, draftwork, metalsmithing, surveying. Yet in the states there will be a position for every single one of these skills.
Thats 5 American jobs to 1 Australian job. Sounds pretty stupid if you ask me.
I don't know what hell your talking about, every person I know does multiple tasks, perhaps too many as far as I'm concerned. The only way you would have a situation like that in the states is in a Union shop where everyone is designated a job and is only allowed to do said job so as to not take away jobs from other union members.
Unions are a thing of the past, the sooner workers wake up to this the better off they will be.
Yeah ok we get rid of unions.
Then who is going to protect the workers from being ripped off?
Fact of the matter is. Unions have been largely responsible for the political, Social freedoms we enjoy in the west.
Even in companies where on the surface unions look as if they are not needed. They do provide a deterrant from corparation and governmental abuses.
There is an unemployment safety nets, my father was on one. The difference being I enjoy our method of netting, you are provided with a paycheck, just enough to get by for a long enough period. It serve as an incentive to actively and regularly look for work instead of just living on the safety net indefinitely which from some European's models, stagnate economics growth and does nothing to solve the unemployment problem. Retirement incomes is called Social Security, which is also in need of fixing.
Another problem for the U.S. is our mentality. The chance of us doing something to preventive whether it be economically, militarily or socially is slim to none. More often, 99% of the time, we wait till the shit actually hit the fan, then we put drastic change in motion. Take Social Security, the situation is always, "it will be fine till 2030 or 2040 or whenever, no rush to fix it," so most likely, it will be reforms in 2040 when it is no longer a cheap fix. In a way, I am very much hoping for a similar economics crisis as was in the 70's, it would be a very good kick in the behinds to many Americans to change their habit.
That remind me of what Thomas Friedman wrote in one of his book in regard to what a President that understand this era should say:
There, given this mismatch between the long-term opportunities and growth that globalization presents for greater well-being, and its disruptive political, environmental and social impacts, the United States needs a broad strategy to make globalization sustainable - to get the best out of it while softening the worst. Think of the world as a wheel with spokes. At the hub of this wheel is what I would label "globalization and rapid economic and technological change." That is, in plain language, the one big thing that is going on out there. Because it is at the center, we need a different approach to health care, welfare, education, job training, the environment, market regulation, social security, campaign finance and expansion of free trade. Each one of these areas has to be adjusted, adapted or reformed to enable us as a society to get the most out of this globalization system and to cushion its worst aspects. Globalization demands that our society move faster, work smarter and take more risks than at any time in our history. As your President I make you two promises. One is that I will make it my business to equip each of you, and our society at large, to meet this challenge, with the right combination of integrationist programs and social safety nets. The other is that I will a tireless defender of our trade laws to ensure that globalization, while it challenges the American worker, does not allow others to take advantage of our openess by dumping their products here while limiting our access to their markets. I'm not here to tell you this is all going to be easy. In fact, I'm here to tell you that it is going to be really hard. But if we can strike the right balance - and I think we can - we can be the vanguard for the world on how to manage integration in the age of globalization, just as we were the vanguardfor the world on how to manage containment in the age of the Cold War. God Bless America.
Last edited by ViktorNavorski; 12-20-2005 at 09:56 PM.
[QUOTE=Flagg]In my opinion, I think the best chance to potentially avoid or dramatically alleviate most of the problems identified(not to say there aren't other potential "bolt from the blue" crisis on the horizon) is to approach energy security with the same sense of urgency and passion as the Manhattan Project or Apollo Moon Shot.
As energy security is nearly all encompassing for everyone regarding everything, it should be national priority #1 #2, AND #3.[\quote]
bingo. wind power is the best option we have as far as alternate energy goes. move to alternate energy sources and tell the arabs to go drink their oil.
the political system the US has is based more on gratifying the needs of those who paid to put the pols there. most americans realize that severe problems come from our additction to oil, but they don't have any other choice. if pols were held more responsible to their constituants rather than their campaign financers, rapid change would occur.Unfortunately, I question the amount of intestinal fortitude our instant gratification society possesses, combined with a political system focused almost exclusively on fulfilling only short-term wants rather than long-term needs.
btw, iraq is a major energy source? that's one part of the list i have a problem seeing. i presume that the southern field will be placed (indirectly, at least) on the same path as iran's. the northern fields depend on the iraqi/kurd situation.
2_sheds, a big reason toyota has fewer problems with their workers is that they treat their workers better than US companies have done.
Posting Permissions
Reply With Quote
